Why Are My Rates Increasing?

New York State insurance rates will be rising. Yes, that is unhappy news for all, even insurance companies.




NYS insurance companies have two ways to increase their insurance rates.

  1. Flex rate maximum of 5% per year.
  2. Approval process from NYS insurance department. Where the insurance company submits supporting claims and expense data to support their request to increase insurance rates to remain financially solvent. Many times, insurance companies submit a request for say 8% increase with supporting proof of need and the NYS insurance department only approves the rate increase at something less than the amount requested. Thus, in theory, creating a potential long-term solvency profitability issue for the denied insurance company.

All geographic regions of the country need a variety of insurance companies competing for your insurance premiums.  A healthy insurance marketplace is where the insurance companies have the financial ability to pay claims now and in the future. When insurance companies are not allowed to charge proper/fair premiums for their insurance risk, many insurance companies will choose to reduce their presence in the free marketplace in a variety of ways.

They may choose to reduce or eliminate certain insurance policy types in the State- for example, an auto policy or type of autos like a Tesla or BMW.  They may remove payment options and require payment in full for the policy term. They may require very large deductibles. Insurance companies may require you to place ALL of your insurance with that same one insurance company.  The consumer in that state loses with any one of those restrictions.  The restrictions are the only way the insurance company may attempt to place pressure on the Insurance department to have their specific rate approved.  Along that process, the consumer has been hurt both financially also by time and effort in finding the best, most proper insurance policy for their dollar.

I truly believe for the protection of the consumer in the long run the State of New York and other States need to work towards a goal of having STRONG insurance companies operating in their State. The consumer will ultimately win with lower prices and choices where to insurance their assets.

Currently, as I write this post, insurance companies’ rates are facing large impacts on claim repair costs, both for Home and Auto insurance in New York State.  I have been told by numerous insurance companies like Progressive, Allstate, and Plymouth Rock, that their claims expenses have increased tremendously over the past six months. See the Allstate Article link Published by the Insurance business magazine.

Allstate Article

My hope is that the Insurance Department of NY will see the long-term positive effect for the consumer in proper management of rate increases.  Some other states like Florida for example currently have extremely limited home insurance options and choices for the homeowner.

When your auto insurance, home insurance or business insurance rates increase on your policy renewal please understand the behind the scene reasons. Honestly, in all the years I have been helping clients purchase the best insurance for their personal situation, I have never come across a sinister insurance company.  Yes, at claim time some insurance companies communicate with you better. However, they are not out to get you. Please call your local agent you have known for years and have her or him provide their reasons for the rate increase. Unfortunately, large inflation is a scene in many sectors and then starts to affect other business sectors.

Always feel free to call our office for a personal conversation addressing your concerns and questions relating to your insurance, we are here to provide guidance.  www.YourOwnAgent.com

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